At this year's OracleWorld being held this week in San Francisco, Oracle CEO Larry Ellison outlined the company's next big project: grid computing. Ellison says the new server architecture can lower costs and provide increased reliability.
"The industry has been on a quest to build bigger and bigger mainframes for the past 40 years. We've been chasing the same dream of building the fastest computer in the world," Ellison explained. "After 40 years, now there's an alternative to the one, big server approach: It's enterprise grid computing."
Ellison noted that the three drawbacks of traditional server approaches are limited capacity, high cost, and limited reliability. When the one server goes down, the application also goes down. Since grid computing connects low-cost computers, storage, and networks together to act as one computer, but at a fraction of the cost and with ultimate reliability, there is no single point of failure, he said.
He went on to explain the immense cost savings and the significance of Oracle's ability to run packaged business applications like SAP or any other CRM solution, unchanged, which means that any business can take advantage of the new software without changing code.
"It's capacity on demand. Plug another server into the grid and the application runs faster and more reliably, and the capacity is inexpensive," Ellison said. To underscore his point Ellison said that comparing a single IBM mainframe with an Oracle grid built with inexpensive Intel-based blades will result in a 30-to-1 cost savings for customers.
"We've been working on this for 12 years, starting with Oracle Parallel Server, then Real Application Clusters, and now Grid. It's technology that keeps getting better and better," Ellsion said.
Analysts are quick to recognize Oracle's boldness of vision. "Oracle is thinking big. Rather than arguing about whether Siebel or Oracle has better CRM, Oracle is taking the debate to a higher level," says Patrick Walravens, managing director and senior research analyst covering application software at JMP Securities. "Oracle wants to provide the entire IT infrastructure to save clients money. This is a powerful message; now we need to see if they can execute on it. If they can it will make it very difficult for more focused vendors like Siebel to compete."

Oracle also announced this week that some of its partners, including Computer Associates, Digex, F5, HP, Micromuse, Sun Microsystems, and TUSC, are working closely with Oracle to develop integration points that will reduce the management complexities of enterprise grid computing and other multivendor technology environments.